Will Apple ‘Inherit the Earth’ in a Future Energy Market?

NRG Energy (NYSE:NRG) CEO David Crane shared his perspective on the rapidly evolving changes that are taking place in the energy market today and offered his predictions on which companies may one day benefit from this disruption in a recent interview with the Atlantic. Crane also outlined the reasons why he believes Apple (NASDAQ:AAPL) may have a major role to play in the future of the energy industry.

While NRG still derives most of its energy production from fossil fuel power plants, the company has also developed the use of green energy technologies such as wind and solar. Ironically, the same green energy technologies that NRG has developed may one day destroy the utility model that the company is currently based on. This is because more consumers are beginning to generate their own electricity via “rooftop solar arrays, fuel cells, wind farms, and self-contained power systems called microgrids.”

As energy production becomes more distributed, utilities like NRG that generate and supply electricity will become increasingly obsolete. “I can’t tell you how quickly the switch to distributed generation will happen, but I’ll tell you that after a couple more Superstorm Sandy’s it’ll happen a hell of lot quicker,” Crane told the Atlantic.

Crane noted that NRG’s current position is similar to the position that traditional “fixed line telephony” held in 1985. “Right now it’s about the time where you can say it’s the end of the long-distance fixed-line world,” said Crane via the Atlantic. “Let’s just call it game over, cell phones won. But it took 25 years.” Although Crane believes the decline of the utility model is inevitable, he also believes that the greatest market disruption will occur in about five years and that it will become “a free-for-all.” However, Crane argued that NRG’s future competitor will not be a traditional power company. Instead, Crane expects that the next big energy company will come from Silicon Valley.

“One of the changes we’re talking about when you’re talking about balancing everyone’s power systems in their house is that it basically becomes an information technology-based industry,” Crane told the Atlantic. “Of the big four companies that will inherit the Earth – Facebook (NASDAQ:FB), Google (NASDAQ:GOOG), Apple, and Amazon (NASDAQ:AMZN) — the one that has shown the most interest in this space is Google. But Apple has a history of showing no interest in an area and suddenly dominating it.”

Although it is unknown if Apple has ever explored the possibility of becoming an energy distributor or producer, the Cupertino-based company does have some experience with renewable energy. According to Apple’s website, the company’s data center in Maiden, North Carolina features “the nation’s largest end user-owned, onsite solar photovoltaic array.” Apple also noted that, “Our goal is to power every facility at Apple entirely with energy from renewable sources — solar, wind, hydro, and geothermal.”